State senators give AG Kane warm welcome at budget hearing

Pa. attorney general is praised for ruling that Corbett's contract to privatize the lottery is illegal.

February 21, 2013|By Steve Esack, Call Harrisburg Bureau

HARRISBURG — Kathleen Kane is rolling.

In just 24 days in office as the state's first Democratic and female elected attorney general, Kane has made two big decisions that roiled the Capitol. In January, she closed a loophole in an existing gun permit law.

Last week, she ruled Gov. Tom Corbett's contract privatizing the management of the Pennsylvania Lottery is an illegal, overreaching use of executive powers under the state constitution and Lottery Act.

On Wednesday, she received a warm welcome from Republicans and Democrats for those decisions when she appeared before the powerful Senate Appropriations Committee to plea for a 16.5 percent hike to bring her agency's 2013-14 budget up to about $91 million.

Corbett has proposed level funding for Kane's office. Though they didn't commit to an amount, committee members promised to find her more money.

State Sen. Robert Tomlinson, R Bucks, told Kane said he and other legislators spent a decade trying to get the casino gaming industry started before it was approved in 2004.

Based on that experience, he said, Kane made the right call in deciding the governor's contract was illegal because it would have sidestepped the legislative process by creating computerized gambling games.

"I think any expansion into computer gaming ... would be a duty of legislation," Tomlinson said.

Sen. Larry Farnese, D-Philadelphia, praised Kane for following up on a campaign promise to close the so-called Florida loophole, which allowed Pennsylvanians to apply for and receive a concealed-carry gun permit from Florida after being denied one here.

"You should be commended on that," he said.

Corbett has recommended level funding the attorney general's office in 2013-14 at about $78.1 million, 4 percent less than it received in 2011-12.

That is not enough money, Kane told senators. Rising salaries and benefits will cost an additional $6 million alone, she said.

If she does not get more funding, Kane said, she will have to lay off 57 employees and close regional offices. Those cuts, Kane said, would hit at a time the state is seeing more people download child pornography and a greater presence of Mexican drug cartels, a syndicate she repeatedly referenced.

Sen. Stewart Greenleaf, R-Montgomery, said he knows Kane's office has been hit hard in recent years by decreased staff in the consumer protection wing. He asked how that has affected the unit's ability to handle consumer complaints.

The number of consumer complaints handled was down by 12,000 to 42,000 in the last five years, Kane said. That doesn't mean fewer people are being scammed, she said. It means she does not have the staff to field the complaints, let alone investigate them.

Sen. Pat Vance, R-Cumberland, how many employees are in the attorney genera's office.

The agency's review was handled by chief deputy attorney general Bob Mulle, one of two lawyers who review 5,000 contracts a year, Kane said. During Mulle's analysis he came up with a series of questions, centered in part on what sort of management duties Camelot would have, she said. Mulle forwarded it to the Office of General Counsel in the administration.

The counsel office then wrote an 11-page response, she said, that did not answer Mulle's questions.

The 1971 lottery law calls for the revenue secretary, a gubernatorial appointee, to operate and administer the lottery and determine how and where lottery tickets are marketed and sold, Kane said. It does not allow the revenue secretary to outsource management duties without legislative approval, she said.

In addition, Kane said, the contract violated the constitution's "sovereign immunity" clause by potentially giving Camelot the right to sue the state for "indirect expenses." Kane also said her department determined that only the Legislature can approve online games such as keno.

Under questioning by Sen. John Gordnor, R-Columbia, Kane said she would share some of her agency's legal memos but may not be legally permitted to share the 11-page response from general counsel because it came from another agency.

Sen. Mike Brubaker, R-Chester, then commended Kane for her explanation of the lottery ruling, saying she was more forthcoming than he thought she would be.

After the hearing, Kane told media members she hopes Corbett does not sue in Commonwealth Court to try to reverse her lottery ruling.

"We did our job," she said, "and I think we did it correctly."

She goes before the House Appropriations Committee on Thursday. It's unknown whether she'll get as warm a welcome as she did before the senate.